Hi James

Here is my answer. It's not a model answer but just a sample of how you
can approach the question. I understand that its really not easy to
"answer " a problem question, as often we have lots of knowledge but we
just don't know how to start and what we ought to write.Anyway ,
practice made perfect, just keep attempting questions , you will find
it much easier after that. Also, the Bonus materials from OLC is also
really helpful. It think its an express way to learn about contract
law.

______________________________________________________________________________

Phil is advised to bring an action against Beale Plc under
Misrepresentation ,which is a false statement of existing or past facts
which is made by one party of the contract to induce the other party to
enter into the contract. ( Anson).

Beale Plc falsely stated that the turnover of the shop is would reach
£50,000 per annum, with an expected profit of £20,000.

In order for there to be an actionable misrepresentation, all the above elements must be established.

FALSE STATEMENT OF FACT

Although The statement made by Beale's manager is a false statement , Beale Plc may argue that it's merely a statement of opinion , as opposed to a statement of fact. ( Bisset v Wilkinson ) .

However, there is an exception where a statement of "opinion" can be an
actionable misrepresentation , if the person made the statement is a
person with specialised knowledge or skill., as seen in two two leading cases.

Firstly, Hedley Byrne v Heller [1964] where the court found that a statement made negligently that was relied upon can be actionable in tort.

Secondly, the Case of Esso Petroleum v Mardon [1976] , where Lord Denning transported the tort into contract law, stating the rule as:

if a man, who has or professes to have special knowledge or
skill, makes a representation by virtue thereof to another…with the
intention of inducing him to enter into a contract with him, he is
under a duty to use reasonable care to see that the representation is
correct, and that the advice, information or opinion is reliable

As per the case of Esso Petroleum v Mardon, Beale Plc 's manager is likely to be considered as someone with
specialized knowledge of skill .

INDUCEMENT

And Phil has been induced by his statement to enter into the contract ( Thomas v Horsfall ; Curtis v Chemical Cleaning & Dyeing Co.) .

Beale Plc might argue that Phil was given the opportunity to varify the
truth of the statement , as Beale Plc invite Phil to have an
independent valuation carried out but Phil refused. It is submitted
that this will not affect Phil's claim as in Redgrave v Hurd it was held that the mere fact that a person has an
opportunity to check the misrepresentation, and fails to do so, will not
prevent that person from relying on it in an action for specific performance. A
duty to inquire may arise, but ordinarily, a failure to check will not be fatal
to the defence.

REMEDIES

In determining the remedies that are available for Phil , it will
depends on the state of mind of Beale Plc 's manager when the
misrepresentation was made.

Phil is advised that there are three different routes to claims for remedies , firstly, Negligent misrepresentation at common law
which occurs when the defendant carelessly makes a representation while
having no reasonable basis to believe it to be true.

Secondly , Fraudulent Misrepresentation where the defendant made a false statement knowingly or carelessly without believing in its truth. ( Derry v Peek) . The standard of proof is extremely high and the burden of proof will be on the claimant ( Phil).

Thirdly, Phil can claim for remedy under S2(1) of the Misrepresentation Act 1962. Phil
will be advised that this appears to be the most profitable route for
him as the burden of proof is on the defendant ( Beace Plc) to prove
that the defendant has a reasonable ground in believing the statement is true ,
failing which Phil will be able to recover all losses which directly
flows from the misrepresentation , including those which are not
reasonably foreseeable. ( Dolye v Olby ) . This includes any loss of
profit ( East v Maurer) .

Therefore, Phil is likely able to recover the loss of profit 20,000 pound from Beale PLC and also to rescind the contract
with Beale Plc. On top of that Phil can also recover the cost he spent
for new equipment which ncludes an electronic till and display
material for a further £5,000.

However , if Beale Plc is able to prove that they have a reasonable
ground in believing that the statement is true, Phil will only be able
to claim remedy under Innocent Misrepresentation s2(2) Misrepresentation Act 1962 , where Phil can only go for rescission and indemnity, which is to cover partly or the whole expenses that he has incurred -- ie: £5,000. spent on equipment He will not be able to recover the loss of profit.

Regards

Madelyn G.